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Jot this down in your notebook: Just because Picasso liked something doesn't mean it will work as an IPO.

Shares of
Moleskine,
maker of those black, hardcover notebooks popularized by Vincent van Gogh, Pablo Picasso, and Ernest Hemingway, have plunged more than 20% since an initial public offering a few weeks ago, and there's little reason to expect a recovery.

Paper Loss: Shares of Moleskine, whose notebooks have long been a favorite of aspiring artists, have plunged 22% in three weeks.
William Waitzman for Barron's

It's an unfortunate blemish on an illustrious history. Introduced by Parisian bookbinders in the late 19th century, the notebooks took on their name in 1986, when the British travel writer Bruce Chatwin referred to them as moleskines in his book The Songlines. A Milanese stationer, Modo & Modo, grabbed the name and ran with it. In due course, Moleskine notebooks became must-have accoutrements for aspiring artists and writers, which in turn prompted interest from financial types. Syntegra Capital, a European private-equity firm, bought a majority stake in 2006. Last month, Moleskine became the first IPO in Milan in more than a year.

At a recent 1.77 euros, the shares (ticker: MSK.Italy) are off 22% from the offering price, even as Milan's market has risen 3.7%. The outlook isn't good. Though sales climbed 16% last year, to €78 million ($102 million), that was way off from 26% in 2011. The notebooks, sometimes $25 a pop, are clearly becoming a harder sell in budget-stressed Europe, Moleskine's top market.

The stock, traded only in Europe, isn't cheap either, at 20 times 2012 earnings. It would be great if Moleskine put the IPO proceeds to effective use, but most of the money went to selling shareholders—Syntegra, Index Ventures, and founder Francesco Franceschi and management. We'd prefer a Picasso, thanks.

Last Week: Review

Terror Comes to Boston

The Boston area was locked down as authorities hunted for one of two brothers of Chechen descent, described as terrorists, who are believed responsible for two bombs at the Boston Marathon that killed three people and injured more than 170, and for the shooting death of a campus police officer at the Massachusetts Institute of Technology. One brother, Tamerlan Tsarnaev, 26, was killed in a police action in the Boston suburb of Watertown. The other, Dzhokhar Tsarnaev, 19, was still at large.

System Risks on the Rise

Massive monetary stimulus by major economies is raising risks to financial stability, the International Monetary Fund said. Prolonged stimulus could create "significant adverse side effects," a report said. At the IMF spring meetings, finance ministers of the biggest economies were expected to call for avoiding competitive devaluations.

Still Tarnished

Gold prices recovered a bit after Monday's 9% rout. On the week, the yellow metal fell 7%, or $105.70 a troy ounce, to $1395.30. The Dow Jones Industrial Average fell 2%, or 317.55 points, to 14,547.51, suffering its worst week since last June.

A Stern Warning

The head of Germany's central bank warned that Europe's debt crisis would take as many as 10 years to overcome. Bundesbank President Jens Weidmann told The Wall Street Journal that the European Central Bank could lower rates if necessary, but that wouldn't turn around the bloc's fortunes.

Gun-Control Bill Defeated

The Senate defeated the most far-reaching gun-control legislation in 20 years, rejecting expanded background checks for buyers of firearms and a ban on assault weapons. President Obama said "this effort isn't over." Also, senators unveiled a bill to overhaul immigration.

IMF Cuts Growth Forecasts

The International Monetary Fund lowered its estimate for global economic growth two-tenths of a percentage point to 3.3%, on Europe's persistent recession. It said the U.S. economy would expand 1.9%.